Don’t Hide the Truth

Thursday, June 26th, 2008

One of the unkindest things a leader can do is cover for poor performance with a faint praise or by avoiding the issue altogether. Absolutely no good comes from acquiescing performances that fall below expectations. High performers are frustrated and angered by incompetence in their midst, the low performers repeatedly suffer failure, and the leader’s judgment is questioned and credibility threatened throughout the organization. Once it is understood that poor performers suck the life out of companies, truthfulness becomes a much easier and salient option.

Leaders who hide or neglect the truth can bring catastrophic results. Authors Olson and Van Beever have coined the term three-part psychology paralysis to describe ways of obfuscating the truth in organizations. As applied to companies like Kodak, Sears or Caterpillar, the authors describe that the psychology of self-deception consists of three ingredients: disdain for the competition, denial of threat and rationalization of the current course of action by invoking false assumptions about customers, competitors and markets. As a consequence, all these three companies witnessed the gradual but ultimately dramatic decline of their revenues and privileged position in the market.

Jay Ireland, President and CEO of GE Asset Management uses the metaphor of boiling a frog to death by gradually turning up the heat in increments not sensed by the frog. He realizes that people easily can be seduced into thinking everything is alright when it truly isn’t. Ireland periodically would take the pot off the stove to test the water temperature. Periodic assessments to check if the company is evaluating the situation correctly and making the right measurements help to avoid performance-related falsehoods and future surprises.